Business
This is why India’s consumer market is a $1 trillion investment opportunity

The fundamentals of the Indian economy remain strong, as RBI Governor Shaktikanta Das recently stated. India’s growth rate is among the fastest in the world, retail inflation has moderated, buffer food stocks are abundant, forex reserves are substantial, and the current account deficit is expected to remain “well within sustainable levels.”
Domestic consumption is making a strong comeback, traditionally one of the main drivers of India’s economic growth. This is great news for businesses of all sizes. Simply put, when consumers spend more, businesses have more capital to invest in, and increased liquidity throughout the system energises complementary sectors and higher-end goods and services.
But what is the significance of this surge in domestic consumption?
One, as the festive season approaches, these numbers are likely to rise even more. Between August and November, when sales of everything from two-wheelers to real estate are at their peak, Indian consumers tend to spend more. Given how quickly consumption has recovered, the figures for the next three quarters will likely be even better.
Two, for better or worse, demand continues to drive India’s growth story. In a typical fiscal year, private expenditure accounts for approximately 55 per cent of the total national GDP. Furthermore, it has a significant impact on the next major growth driver, Gross Fixed Capital Formation (GFCF), which accounts for the money invested by businesses. As a result, strong domestic consumption translates unintentionally into strong economic growth.
Three, rising household consumption will boost demand for goods and services across industries, especially those involving significant amounts of “discretionary” or luxury spending. Product segments influenced by “premiumisation” trends are included in the latter. These include everything from chocolates and alcoholic beverages to laptops and headphones, as well as clothing and cosmetics. In some categories, such as automobiles, demand for premium products has outpaced demand for entry-level variants. In FY22, for example, premium car sales increased 38 per cent year on year, while lower-priced car sales increased only 7 per cent.
Why is luxury spending increasing in India?
Rising consumer incomes and purchasing power are aiding it: average per capita income has already surpassed USD 2,000 and is expected to exceed USD 12,000 by 2047. Furthermore, the rapid growth of the e-commerce sector and digital transactions has increased customer access to the luxury market. Furthermore, as consumers have become more value- and customisation-oriented, previously dominated by HNWIs, premium segments are rapidly diversifying to include Millennials and non-metro consumers. The typical cohort of HNI and NRI customers has also expanded to include affluent middle-class consumers in some segments, most notably luxury housing, due to the proliferation of remote and hybrid working models.
Furthermore, the premium product space is still in its early stages and remains largely untapped. As a result, market participants have numerous opportunities. For example, while the Indian smartphone market fell by 1 per cent year on year in H1CY22, the premium segment increased by 83 per cent. This segment, however, accounts for only 6 per cent of the total smartphone market.
As domestic consumption continues to rise, premiumisation trends will be boosted across other sectors, from quick-service restaurants (QSRs) and home products to hospitality and healthcare. This has happened before. According to Jun Nie and Andrew Palmer’s paper “Consumer Spending in China: The Past and the Future,” the threefold increase in household spending in China between 2000 and 2015 was accompanied by a sevenfold increase in spending on transportation and communication services.
So, where can investors find investment opportunities?
Discretionary consumption and premiumisation will account for a disproportionate share of growth.
Hospitality and tourism players will benefit from increased air travel, increased demand for top-tier hotels and resorts.
The automotive industry’s clientele for premium car models will become more diverse, especially as the EV revolution gains traction.
The prospects for the entertainment sector are just as promising, with people willing to pay for subscription packages and remain loyal customers even in tier-2 and tier-3 cities as long as there is content worth the money.
Companies in real estate, home-related products, and the FMCG personal care space will also benefit greatly.
The key takeaway is that Indian consumer markets will continue to be a key focus area for global public and private equity investors. Existing and new companies will generate hundreds of billions of dollars in market capitalisation.
To summarise, domestic demand will likely continue to drive India’s economic growth story, which will be increasingly influenced by the discretionary spending of a growing cohort of “premium” consumers. This trend presents an important opportunity for investors to get a head start on a veritable 21st-century gold rush.
(The views expressed in this article are personal and that of the authors. The authors head AltG, a firm that Offers Proprietary Research That Clients Leverage to Identify and Execute High Growth Capital Allocation Opportunities. You can reach them at ideas@altgind.com)
Business
SIP inflows hit all-time high of Rs 26,632 crore in April: AMFI data

Mumbai, May 9: India’s mutual fund industry saw a historic surge in systematic investment plan (SIP) contributions in April, with investors pouring in a record Rs 26,632 crore last month, according to data by the Association of Mutual Funds in India (AMFI) released on Friday.
This marks the highest-ever SIP inflow for any month, the report said.
In April, 1.36 crore SIP accounts were either closed or matured as part of this process. However, investor interest remained strong. The number of active SIP accounts grew to 8.38 crore in April, up from 8.11 crore in March, showing that people are still keen on building long-term wealth through mutual funds.
April also saw the creation of 46 lakh new SIP accounts, higher than the 40.19 lakh new accounts opened in March.
AMFI said the spike in account closures was due to a planned clean-up and is likely to reduce sharply from May onwards.
“The sustained inflows underscore improving investor sentiment, supported by strong corporate earnings, resilient macroeconomic fundamentals, and a continued tilt towards equities as the preferred asset class,” said Himanshu Srivastava, Associate Director, Manager Research, Morningstar Investment Research India.
Notably, the absence of any major new fund launches during the month indicates that investors largely allocated capital to existing schemes — a testament to their confidence in the long-term growth prospects of Indian equity markets, he added.
The record-breaking investment came even as the industry undertook a large clean-up of inactive accounts.
Despite a slight dip in inflows into equity mutual funds, the overall mutual fund industry continued to grow rapidly.
Total assets under management (AUM) reached an all-time high of Rs 70 lakh crore in April.
This is a big jump from Rs 65.74 lakh crore recorded in March — showing strong investor confidence in the market.
Large-cap mutual funds, which had faced outflows in recent months, bounced back with net inflows of Rs 2,671.46 crore in April.
This was a slight increase from Rs 2,479.31 crore in March. According to the report, this suggest that investors are regaining interest in these relatively stable funds.
Mid-cap funds attracted Rs 3,313 crore during the month, a minor drop from Rs 3,438.87 crore in March.
Meanwhile, small-cap funds continued to perform steadily, drawing Rs 3,999.95 crore in April, only slightly lower than the Rs 4,092 crore they received the month before.
Business
India, Chile make progress on comprehensive economic partnership agreement

New Delhi, May 9: India and Chile have signed the terms of reference (ToR) for a comprehensive economic partnership agreement (CEPA), marking a significant advancement in their bilateral trade relations, the government said on Friday.
The mutually-agreed ToR were signed by Juan Angulo, Ambassador of Chile in India and Vimal Anand, Joint Secretary in Department of Commerce, who is also the Chief Negotiator for India-Chile CEPA from the Indian side.
Both sides reiterated their shared vision for strengthening bilateral relations and look forward to fruitful discussion during the first round scheduled in the national capital from May 26-30.
According to the Commerce Ministry, the CEPA aims to build upon the existing PTA (preferential trade agreement) between the two nations and seeks to encompass a broader range of sectors, including digital services, investment promotion and cooperation, MSME and critical minerals, etc. thereby enhancing economic integration and cooperation.
India and Chile are strategic partners and close allies, sharing warm and cordial relations.
Bilateral ties have steadily strengthened over the years with the exchange of high-level visits. A Framework Agreement on Economic Cooperation was signed between the two countries in January, 2005, followed by PTA in March, 2006.
Since then, economic and commercial relations between India and Chile have remained robust and continue to grow.
According to the ministry, an expanded PTA was subsequently signed in September 2016 and became effective from May 16, 2017.
In April 2019, both countries agreed to pursue a further expansion of the PTA with three rounds of negotiations between the years during 2019-2021. To deepen their economic engagement, both sides expressed their intention to negotiate a CEPA to unlock the full potential of their trade and commercial relationship, boosting employment, facilitating investment promotion, and cooperation and exports, as suggested by the Joint Study Group established under the Framework Agreement.
The JSG report was finalised and signed on April 30, 2024.
Business
Pakistan stock markets continue to bleed, down 14 pc since Pahalgam attack

New Delhi, May 8: The stock markets in Pakistan further tanked on Thursday, as trading was halted at the Karachi Stock Exchange (KSE) amid rising geopolitical tensions.
Karachi Stock Exchange fell more than 6 per cent on Thursday before the trading was halted. The stock exchange has been witnessing a continuous decline since the barbaric Pahalgam terror attack.
The main index, Karachi Stock Exchange 100 Index (KSE-100), has slipped by more than 13 per cent since April 22 when the terror attack happened, killing 26 people, most of them tourists.
On April 22, the KSE-100 index was at 1,18,430, which has now dropped to 1,03,060.
Apart from this, another Pakistani stock index, KSE-30, has also fallen more than 14 per cent since April 22.
Amid the grim state of the stock markets, Pakistan has only $15 billion of foreign exchange reserves left and is on the verge of economic collapse.
The country is seeking a fresh loan worth $1.3 billion from the International Monetary Fund (IMF) to run its economy.
Pakistan’s economy, in the initial years after independence, grew at the same pace as India’s, backed by US aid and donations from the oil-rich Islamic nations.
However, while democratic India kept its focus on economic development and lifting its masses out of poverty, Pakistan has been rocked by bloody coups and military dictatorships, with the army Generals still calling the shots and fuelling hostility against its more prosperous neighbour.
Pakistan was on the brink of sovereign default in 2023 and had to be bailed out by a $3 billion IMF loan.
The country is still critically dependent on this financial lifeline and is desperately trying to raise another $1.3 billion climate resilience loan.
Overall, the neighbouring nation now faces an economic freefall – crippled by political chaos and the long-term cost of harbouring terrorism.
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